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3d 663
Defendants, Boyd & Stevenson Coal Company (Boyd & Stevenson) and Old
Republic Insurance Company (Old Republic), seek relief from an order of the
Ezra Slone, claimant's deceased husband, worked as a coal miner for Boyd &
Stevenson from 1970 to 1974. Old Republic insured Boyd & Stevenson's black
lung claims. After leaving Boyd & Stevenson, Slone worked as a coal miner for
Viking Mining Corporation (Viking) from 1974 to 1988. Viking's insurer for
black lung benefit claims was Rockwood Insurance Company (Rockwood).
Ezra Slone filed a claim for black lung benefits in 1989, and on February 14,
1990, an ALJ issued a decision awarding Ezra Slone benefits. Viking, as
Slone's most recent coal mining employer, was designated as the responsible
operator along with its insurer, Rockwood. However, previously, on June 1,
1989, Viking had been "automatically terminated" as a corporation for failing
to file annual reports with the Commonwealth of Virginia. Nevertheless,
Viking's insurer, Rockwood, remained in existence. Rockwood, therefore,
assumed responsibility for covering Viking employees' black lung claims and
began making benefit payments to Ezra Slone.
After Ezra Slone's death, his widow and only dependent under the Black Lung
Act, Mrs. Irene Slone, filed a claim in April 1999 for survivor benefits. The
Office of Workers' Compensation Programs (OWCP) approved the award of
benefits to Mrs. Slone and initially designated Viking as the potentially
responsible operator on the claim. After discovering Viking's termination as a
corporation and Rockwood's insolvency, the Director turned to VPCIGA for
payment of benefits. Pursuant to a letter dated June 29, 1999, VPCIGA denied
that it was responsible for payment of Mrs. Slone's survivor benefits because "
[a]ll claims [against Rockwood] must have been filed by August 26, 1992."
6
The Director accepted VPCIGA's argument and designated the next most recent
employer, Boyd & Stevenson, as the operator responsible for payment of Mrs.
Slone's benefits. Boyd & Stevenson and Old Republic contested liability and
the case was transferred to the Office of Administrative Law Judges for
hearing.1
After a hearing and pursuant to a written order issued September 29, 2000, the
ALJ awarded Mrs. Slone benefits and designated Boyd & Stevenson as the
responsible operator pursuant to 20 C.F.R. 725.492(a)(4) (1999). The ALJ
determined that because the evidence showed that Viking had been dissolved
more than eleven years prior to the hearing and Rockwood had been liquidated
in 1991, Viking and Rockwood were not currently "capable of assuming [ ]
liability for the payment of continuing benefits," and therefore Viking did not
meet the definition of responsible operator under 20 C.F.R. 725.492(a)(4)
(1999). The ALJ also concluded that because Viking's officers had complied
with regulations requiring them to obtain and keep insurance while the
company was in operation, the officers were not liable individually for payment
of benefits. See 20 C.F.R. 725.492(a)(4), 725.495(a) (1999). The ALJ
accepted, without discussion, the Director's position that VPCIGA's August 26,
1992, deadline applied to Mrs. Slone's claim for survivor benefits.
On appeal, the Benefits Review Board affirmed the decision of the ALJ. With
respect to defendants' contention that VPCIGA was responsible for the
payment of Mrs. Slone's benefits, the Board concluded that VPCIGA "is a
statutorily established method of providing prompt payment of covered claims
that result from the insolvency of an insurer" and because Mrs. Slone's claim
was filed after August 26, 1992, VPCIGA "was not legally obligated by the
BLBA or state statute to provide insurance coverage to the claimant based on
her 1999 survivor's claim."
On January 18, 2002, Boyd & Stevenson and Old Republic filed with this court
a petition for review of the Benefits Review Board's final decision affirming the
ALJ's order.
II.
10
On review, Boyd and Stevenson and its insurer, Old Republic, advance two
arguments for why the decision of the Benefits Review Board was in error.
First, they maintain that federal law requires all insurers and reinsurers to
assume full liability for black lung benefits claim payments, and therefore that
the BLBA preempts contrary state laws which limit reinsurers' liability through
under-inclusive filing deadlines. Second, defendants argue that even if
Rockwood and VPCIGA are not responsible for payment of Mrs. Slone's claim,
the Director, in accordance with Dir., Office of Workers' Compensation
Programs v. Trace Fork Coal Co., 67 F.3d 503, 507 (4th Cir.1995), failed to
investigate whether Viking, through an undiscovered successor or through
Viking's former officers in their individual capacity, had the ability to pay
survivor benefits. And Mrs. Slone raises another point addressed in her briefs:
Whether Virginia law allows VPCIGA to deny benefit payments to Mrs. Slone
based on VPCIGA's position that her claim was not timely filed and whether
Mrs. Slone's claim is separate and distinct from her husband's original claim.
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12
We need not, and do not, determine whether federal law preempts Virginia law;
or whether the Director failed to properly investigate whether Viking had the
ability to pay Mrs. Slone's survivor's claim through a successor or its corporate
officers; or even whether Old Republic is the responsible operator under the
Black Lung Act. Rather, our review of the applicable contract provisions and
principles of insurance law leads us to conclude that VPCIGA is obligated by
Virginia law to pay Mrs. Slone's survivor's claim.
III.
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claimant, which arises out of and is within the coverage and is subject to the
applicable limits of a policy covered by this chapter and issued by an insurer
who has been declared to be an insolvent insurer.
15
16
While plaintiff's claim for survivor benefits clearly falls within this definition,
VPCIGA seeks to limit its liability through statutory language stating:
17
a covered claim shall not include any claim filed with the Guaranty Association
after the final date set by the court for the filing of claims against the liquidator
or receiver of an insolvent insurer.
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20
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If you are an insured or claimant, and you wish to file a claim for monies owed
to you by Rockwood, you must file a Proof of Claim form with the Statutory
Liquidator not later than 8/26/92. If you fail to file a proof of claim by this date,
your claim may not be considered as a valid claim against the Estate. A proof
of claim is enclosed.
23
Instructions for the completion of this form are attached to the Proof of Claim.
24
The DOL maintains that Mrs. Slone's claim for survivor benefits is a separate
24
The DOL maintains that Mrs. Slone's claim for survivor benefits is a separate
and distinct claim from her husband's original claim, and therefore because she
did not file a claim for survivor benefits until April 1999, her claim was filed
"after the final date set by the court for filing of claims against the liquidator or
receiver of an insolvent insurer" and is time-barred. Because principles of
insurance law and the rules of statutory interpretation conflict with VPCIGA's
interpretation, we conclude that Mrs. Slone's claim was timely filed because
her claim is derivative of her husband's claim which was filed before the
August 26, 1992, deadline.
25
A principal problem with the DOL and VPCIGA's argument is that it creates a
condition impossible for Mrs. Slone to perform. Mrs. Slone's husband did not
die until March 25, 1999, and therefore, the position advanced by the DOL and
VPCIGA would have required Mrs. Slone to file a claim for survivor benefits in
1992, prior to her husband's death and before her derivative right to benefits as
a survivor of Ezra Slone had accrued. Thus, filing a claim for benefits prior to
1992 was a condition impossible for Mrs. Slone to fulfill. The general rule of
insurance law dictates that conditions precedent which are impossible of
performance are ineffectual and void. Insurance Law and Practice, Appleman,
1981, 7005; Couch on Insurance 3d, 83:26; see generally Daburlos v.
Commercial Ins. Co., 381 F.Supp. 393, 400 (E.D.Pa.1974); Strauther v. Gen.
Am. Life Ins. Co., 141 S.W.2d 128, 130 (Mo.Ct.App.1940). Accordingly, we
reject DOL and VPCIGA's argument that either an insurance contract or a court
order created a duty impossible for Mrs. Slone to perform. For court orders, see
generally Maggio v. Zeitz, 333 U.S. 56, 69, 68 S.Ct. 401, 92 L.Ed. 476 (1948)
("Every precaution should be taken that orders issue, in turnover as in other
proceedings, only after legal grounds are shown and only when it appears that
obedience is within the power of the party being coerced by the order.").
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when it may be understood in more than one way or when it refers to two or
more things at the same time. Lincoln National Life Ins. Co. v. Commonwealth
Container Corp., 229 Va. 132, 136-37, 327 S.E.2d 98, 101 (1985). Finally,
doubtful, ambiguous language in an insurance policy will be given an
interpretation which grants coverage, rather than one which withholds it. St.
Paul Ins. v. Nusbaum & Co., 227 Va. 407, 411, 316 S.E.2d 734, 736 (1984).
28
Am. Reliance Ins. Co. v. Mitchell, 238 Va. 543, 385 S.E.2d 583, 585 (1989).
29
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The notice provision does not require persons currently receiving benefits to
refile their claim because the claim is already known and can be forwarded to
VPCIGA for handling.
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Similarly, a survivor's claim arises out of the same injury as a miner's claim and
therefore both VPCIGA and Rockwood knew that once the miner died, the
payments would not necessarily cease, but instead that the claim would
continue if the miner had a surviving spouse or dependent. Because survivor's
claims arise out of the same facts and are derivative of the original claim, they
are not new claims for bene-fits and thus should be considered timely if the
miner's original claim is timely filed. As Mrs. Slone was not making a new
claim for benefits,2 she was not required to file a separate claim to meet the
August 1992 deadline.3
33
In this respect, this case is distinguishable from the Virginia Court of Appeals
decision in Uninsured Employer's Fund v. Mounts, 24 Va.App. 550, 484 S.E.2d
140 (1997). The Mounts claimant, a former coal miner employee, discovered he
had pneumoconiosis after the deadline for making claims to Rockwood's
liquidator had passed. Mounts, 484 S.E.2d at 142. Because the claim was filed
after the deadline, the Virginia Supreme Court held that VPCIGA was not
obligated to pay benefits under the statute. Mounts, 484 S.E.2d at 144-45. In
this case, to the contrary, Slone's original claim was filed before the deadline,
and unlike the claimant in Mounts, VPCIGA knew that Mr. Slone was
receiving benefits on his claim prior to the August 1992 deadline. VPCIGA
also knew that the same essential facts establishing the miner's claims would
support any derivative survivor's claim after his death. To allow VPCIGA to
bar recovery by creating a technical defense impossible for Mrs. Slone to
comply with is contrary to principles of insurance law and justice. Accordingly,
we adopt an interpretation which recognizes that a survivor's claim is part of a
miner's original claim for filing purposes, and thus we are of opinion that
Mounts does not bar recovery.
34
Finally, we are mindful of the Virginia General Assembly's directive that the
Act creating VPCIGA "be liberally construed" to "provide prompt payment of
covered claims [in order] to reduce financial loss to claimants or policyholders
resulting from the insolvency of an insurer." Va.Code Ann. 38.2-1602, 1604. We do not believe that the General Assembly intended for VPCIGA to
deny payment of survivor's claims based on conditions impossible for the
surviving spouse to perform.
IV.
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Accordingly, the judgment of the Benefits Review Board is vacated and the
case is remanded to the Board with instructions to enter its order designating
VPCIGA as the insurer responsible for payment of Mrs. Slone's survivor
benefits.
37
The Petition for Review is granted and the case is remanded with instructions.
VACATED AND REMANDED WITH INSTRUCTIONS
Notes:
1
Mrs. Slone's entitlement to benefits is not at issue in this case. While Boyd &
Stevenson initially opposed Mrs. Slone's entitlement to benefits, by a letter
dated May 5, 2000, and during the ALJ hearing held on May 12, 2000, Boyd &
Stevenson conceded that Mrs. Slone was entitled to survivor benefits
This is not to say that the surviving spouse or dependent does not have to prove
that she is entitled to survivor benefits. The terms of the notice provision
recognize VPCIGA may require Mrs. Slone to complete additional forms after
Ezra Slone's death to establish that she is eligible for benefits. Additional
qualification requirements, however, do not make this a new claim